However, the manufacturers’ organisation EEF says the new Government must help firms in the region and across the UK tackle the headwinds of input prices and Brexit. Tony McDonough reports

Manufacturers in the North West are currently enjoying a “sweet spot” thanks to an upturn in global markets – however, experts see more uncertainty ahead.

Just days before Britain goes to the polls for the General Election EEF, the manufacturers’ organisation and business advisory firm BDO, have released their latest quarterly survey on the sector.

EEF points to a continued confidence that manufacturing will enjoy further quarters of output and expansion into the second half of this year, despite response balances easing slightly from the results of Q1, despite some gloomy predictions.

Incomes squeeze

However, it warned that progress cannot be guaranteed given the uncertainty ahead, in particular the likely continued squeeze on household incomes and possibility of no deal on Brexit which could hit trade.

In response EEF is urging the new Government to press ahead, as a matter of urgency, with a “bold” industrial strategy to help cement long-term growth prospects for the sector.

Orders up

According to the survey, output and orders in the North West increased in the last three months by a balance of +19% and +11% respectively, below the national picture but still in strongly positive territory.

This was largely driven by export orders growing strongly on the back of a weaker currency and better world markets.

The positive picture is reflected in companies’ recruitment intentions with more companies hiring in the last three months (+11%) with a similar picture for the next quarter expected to continue.

In line with the national picture, however, investment intentions fell back, easing somewhat from increases in investment over the last year.

Revised forecasts

In response to the continued positive economic conditions EEF has revised its forecasts upwards.

Manufacturing is now expected to expand by 1.3% in 2017 and 0.5% in 2018 (1% and 0.1% in Q1) and GDP by 1.8% and 1.3% respectively (unchanged from Q1).

EEF membership engagement director for the North of England, Richard Halstead, said: “Our survey marks another quarter of positive news about growth prospects for North West manufacturers as output and orders have continued to head higher in recent months with the recovery in manufacturing globally a big part of the story.

Resurgent economy

“It’s very encouraging that UK manufacturers have positioned themselves to capitalise on the windfall of a competitive pound and resurgent world economy.

“While growth and confidence hasn’t been knocked off track by the snap election, but it’s not simply plain sailing from here.

“There is the continuing challenge of managing input cost rises; ensuring success in attracting and retaining the skills that are in increasing demand and driving up investment in the sector.

“Whoever forms the next Government must set in stone as a matter of urgency a bold industrial strategy that will help cement the foundations for long-term growth for industry.”